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Dive Brief:

A&E Tire Inc. has agreed to pay $60,000 to settle a sex discrimination lawsuit brought by the U.S. Equal Employment Opportunity Commission (EEOC).

The company allegedly offered Egan Woodward a job and required a background check, but did not hire him after learning that he checked the box labeled "female" on his background screening paperwork, EEOC said. The company then hired someone else for the position.

The company also agreed to send Woodward a letter of apology, make clear in its employment policies that it will not tolerate sex discrimination — including discrimination based on sex stereotyping and transgender status — and to train its managers and employees on the laws prohibiting discrimination.

Dive Insight:

Congressional lawmakers are considering a bill that would add gender identity and sexual orientation to the protections offered by Title VII of the U.S. Civil Rights Act of 1964. The EEOC and several courts have held that Title VII already includes such protections, and the U.S. Supreme Court may soon take up the issue as well. The Trump Administration, along with the U.S. Department of Justice does not agree with EEOC that Title VII already includes protections against discrimination on the basis of gender identity or sexual orientation.

In this instance, EEOC noted that the Colorado federal trial court held that the lawsuit could move forward because the EEOC had "plausibly alleged" that AE Tire had not hired Woodward because he did not conform to sex stereotypes. EEOC said in a statement announcing the settlement that the district court's ruling meant that the court recognized that "discrimination against transgender individuals is discrimination based on sex stereotyping because transgender individuals identify as a sex different from their birth-assigned sex."

While Congress has yet to pass legislation on the subject, several states have put into place their own anti-discrimination laws — 20 states and the District of Columbia have passed legislation that provide gender identity and sexual orientation protection in the workplace. And EEOC has been clear that it will go after related transgressions. "EEOC has been successful for many years protecting transgender applicants and employees from discrimination based on sex," Field Office Director for the EEOC's Denver office Amy Burkholder said in the statement about the A&E Tire settlement.

In light of the rift between agencies and recent activity, employment lawyers have encouraged employers to avoid discriminating against applicants and employees based on sexual orientation or transgender status.